As the problems stemming from the collapse of Baltimore’s Francis Scott Key bridge continue to unravel, Ronald Leibman, chair of McCarter’s Transportation, Logistics & Supply Chain Management Practice, speaks with CFO Brew to discuss the issues for shippers and cargo owners, and the implications of force majeure clauses.
Since it’s impossible to guarantee the boat carrying their goods will arrive as planned, manufacturers should be protected by force majeure clauses in their contracts with customers, who otherwise expect timely arrival of their goods under normal circumstances, Ron said. Force majeure clauses remove liability in instances of unforeseeable catastrophes.
When it comes to recouping losses from the damage, the findings of an ongoing National Transportation Safety Board investigation, “certainly will be quite important in determining what kind of claims can be brought and against whom,” Ron says. The owners “have a lot of loopholes, and a lot of ways they can limit their liability,” but “in the case of this, there seems to be a pretty fair, clear force majeure.”
Ron continued, “I think what manufacturers are going to see, though, is that their customers will expect them to quickly be able to replace the goods and put the goods out in a reasonably fast time or in whatever ship is possible, or potentially even move out of another port, but get it there as quickly as reasonably possible.”